Cash-Out Refinance Loans for Homeowners and Real Estate Investors
Access a portion of your property’s available equity by replacing your current mortgage with a new, larger loan. A cash-out refinance may help fund home improvements, consolidate higher-interest debt, strengthen cash reserves, or unlock equity from an investment property.
Serving eligible borrowers in California, Colorado, and Florida.
Eligibility, available equity, pricing, and loan terms vary by borrower, property, occupancy, and loan program.
See How Much Equity You May Be Able to Access
Tell us about your property and what you would like to accomplish. A WestPac Lending mortgage professional can review your situation and help you compare available cash-out refinance options.
Homeowners
Explore options for home improvements, debt consolidation, major expenses, additional reserves, or other financial goals.
Real Estate Investors
Review ways to access rental-property equity for renovations, reserves, portfolio growth, or another investment opportunity.
Request Your Cash-Out Refinance Review
Complete the form below and a member of our team will follow up to discuss your goals and available next steps.
Submitting this form does not obligate you to apply and does not constitute loan approval. Loan availability, equity requirements, pricing, and terms vary by borrower, property, occupancy, loan program, and state.
What Is a Cash-Out Refinance?
A cash-out refinance replaces your current mortgage with a new, larger mortgage and allows you to receive a portion of the property’s available equity in cash at closing.
The new loan is used to pay off the existing mortgage and eligible transaction costs. The remaining proceeds may then be available for home improvements, debt consolidation, reserves, another real estate investment, or other qualifying purposes.
Because the funds become part of the new mortgage balance, it is important to compare the potential benefit of accessing equity with the new interest rate, monthly payment, closing costs, and long-term borrowing expense.
Review mortgage refinancing terms from the Consumer Financial Protection BureauYour Current Mortgage Is Replaced
A cash-out refinance is a new first mortgage rather than a separate monthly loan added behind your existing mortgage.
Available Equity Helps Determine the Proceeds
Property value, current mortgage payoff, permitted loan-to-value limits, closing costs, and program requirements all affect the amount of cash that may be available.
The Funds May Support Different Goals
Homeowners may use equity for personal financial objectives, while investors may use rental-property equity for renovations, reserves, or portfolio growth.
Cash-Out Options for Homeowners and Investors
Owner-Occupied Homes
Homeowners commonly explore cash-out refinancing to improve their property, consolidate higher-interest obligations, create reserves, or cover a major planned expense.
Investment Properties
Real estate investors may be able to refinance a rental property and access equity for renovations, property reserves, additional acquisitions, or other investment strategies.
Loan-to-value limits, documentation, pricing, seasoning requirements, and available programs may differ based on occupancy and property type.
How Does a Cash-Out Refinance Work?
The amount you may receive depends on your property value, mortgage payoff, eligible new loan amount, closing costs, and program guidelines. WestPac Lending can help you evaluate these figures before you decide whether to move forward.
Review Your Property and Goals
We begin with the property type, occupancy, estimated value, current mortgage balance, requested cash amount, and how you plan to use the proceeds.
Determine Potential Loan Options
Credit, income, assets, debts, property cash flow, available equity, and loan-program requirements help determine which options may be available.
Complete the Appraisal and Underwriting
The lender verifies the property value and reviews the borrower, property, title, insurance, and required documentation before issuing final approval.
Pay Off the Existing Loan and Receive Proceeds
At closing, the new mortgage pays off the existing loan and approved costs. Eligible remaining funds are then delivered according to the closing and disbursement requirements.
A Simple Cash-Out Refinance Calculation
The potential proceeds are generally estimated by subtracting the current mortgage payoff and eligible transaction costs from the approved new loan amount.
This example is for educational purposes only and does not represent a loan offer, approval, guaranteed property value, or guaranteed cash amount.
The Process May Look Different for Rental Properties
Property Income
Depending on the program, qualification may consider personal income, lease income, market rent, or the property’s debt-service coverage.
Equity Requirements
Investment-property programs may require the borrower to retain more equity than would be required for an owner-occupied home.
Reserves and Documentation
Some programs may require additional reserves, property documentation, lease information, or proof of the borrower’s real estate experience.
How Much Equity Can You Access With a Cash-Out Refinance?
Your total property equity and the amount available through a cash-out refinance are not necessarily the same. The lender must determine the eligible new loan amount before subtracting existing liens, closing costs, and other required amounts.
Total Equity vs. Accessible Equity
Total equity is generally the difference between the property’s current value and the mortgage liens secured by the property.
Accessible equity is usually lower because the new mortgage must remain within the selected program’s loan-to-value limits. Closing costs, prepaid items, escrow funding, and other amounts may also reduce the final proceeds.
Loan-to-value ratio: The new mortgage amount divided by the property’s eligible value. If another mortgage or HELOC will remain open, the lender may also evaluate the combined loan-to-value ratio.
See the Difference Between Total and Accessible Equity
This example is for educational purposes only. It does not represent an available loan program, guaranteed property value, loan approval, interest rate, or guaranteed proceeds.
Property Value
A higher eligible property value may increase available equity, but the value used for underwriting must be supported by the required valuation process.
Existing Liens
First mortgages, second mortgages, HELOCs, and other liens that must be paid through closing reduce the remaining cash proceeds.
Occupancy and Property Type
Maximum leverage may differ for a primary residence, second home, one-unit rental, or two- to four-unit investment property.
Loan Program and Costs
Program limits, credit profile, loan size, pricing, closing costs, prepaid expenses, and escrow requirements can affect the final proceeds.
WestPac Lending can review your estimated property value, current payoff, occupancy, and cash-out goals.
Common Uses for Cash-Out Refinance Funds
Cash-out refinance proceeds may be used for a range of personal, property, and investment goals. The right strategy depends on the cost of the new mortgage, how the funds will be used, and whether the expected benefit supports your broader financial plan.
Home Improvements and Renovations
Homeowners may use available equity to remodel a kitchen, update bathrooms, replace major systems, improve energy efficiency, or complete other planned property improvements.
Consolidating Higher-Interest Debt
Cash-out proceeds may be used to pay off credit cards, personal loans, or other obligations. This can simplify monthly payments, but it also converts unsecured debt into debt secured by the property.
Major Planned Expenses
Borrowers may consider using equity for education, medical expenses, business needs, major purchases, or another significant expense that requires access to additional funds.
Building Financial Reserves
Some homeowners and investors use cash-out proceeds to strengthen emergency savings, establish property reserves, or prepare for future repairs and unexpected expenses.
Improving an Investment Property
Rental-property owners may access equity to complete repairs, modernize units, address deferred maintenance, or make improvements intended to support occupancy and rental income.
Expanding a Real Estate Portfolio
Investors may use available proceeds toward another property, closing costs, renovations, reserves, or other expenses associated with a new real estate opportunity.
Consider the Long-Term Cost of Using Home Equity
A cash-out refinance may provide access to funds at a mortgage-based interest rate, but the proceeds become part of a loan secured by your home. Before refinancing, compare the new payment, loan term, closing costs, and total interest with the expected benefit of the funds.
- Compare the new mortgage payment with your current payment
- Consider whether the loan term will restart or extend
- Review the cost of consolidating short-term debt into a longer-term mortgage
- Maintain sufficient savings after closing
Evaluate the Expected Return on the Accessed Equity
Investors should compare the cost of the new financing with the potential income, appreciation, renovation value, or portfolio benefit expected from the proceeds. Additional leverage can increase opportunity, but it also increases debt service and property-level risk.
- Estimate the property’s payment after refinancing
- Review projected rental income and operating expenses
- Maintain reserves for vacancies, repairs, and debt service
- Compare cash-out refinancing with DSCR, bridge, or private money options
Cash-out refinancing increases the mortgage balance secured by the property. Before proceeding, consider whether the use of the funds justifies the new payment, costs, and long-term borrowing obligation.
Cash-Out Refinance Benefits and Potential Drawbacks
A cash-out refinance can provide access to property equity through one new mortgage, but it also increases the amount secured by the property. The decision should be based on both the immediate use of the funds and the long-term cost of the new loan.
Why Borrowers Consider Cash-Out Refinancing
Access a Larger Amount of Equity
Depending on the property value, existing payoff, and program limits, a cash-out refinance may provide more funds than some revolving credit options.
One Mortgage and One Monthly Payment
The current first mortgage is replaced by a new loan, allowing the accessed equity to be incorporated into one mortgage payment.
Fixed-Rate Options May Be Available
A fixed-rate mortgage can provide a predictable principal-and-interest payment when compared with a variable-rate line of credit.
Flexible Use of Eligible Proceeds
Funds may support renovations, debt consolidation, reserves, major expenses, rental-property improvements, or another real estate opportunity.
Costs and Risks to Review Before Refinancing
Your Mortgage Balance Will Increase
Borrowing against available equity reduces the amount of equity remaining in the property and increases the debt secured by it.
The New Rate May Be Higher
The available rate depends on current market conditions, credit, equity, occupancy, property type, loan size, and the selected program.
Closing Costs Reduce the Net Benefit
Appraisal, title, lender, recording, prepaid, escrow, and other transaction costs can reduce the amount of cash received or increase the new balance.
The Repayment Period May Restart
Replacing an older mortgage with a new longer-term loan may lower the required payment while increasing the amount of interest paid over time.
Look Beyond the Amount of Cash Available
A useful comparison considers the entire new mortgage—not only the proceeds received at closing.
How will the new rate and payment compare with the current mortgage?
How long do you expect to keep the property and the new loan?
Does the expected benefit of the funds justify the closing costs and additional debt?
Will sufficient equity and financial reserves remain after closing?
Compare Financing Cost With the Expected Property Return
When equity will be used for renovations, another acquisition, or portfolio growth, compare the new debt service with projected rental income, operating expenses, reserves, and the expected return from the investment strategy.
Cash-Out Refinance Rates, Payments, and Closing Costs
The interest rate is only one part of a cash-out refinance comparison. Review the proposed payment, loan term, upfront charges, financed costs, equity remaining, and total borrowing expense before choosing a loan.
What Can Affect Your Available Interest Rate?
Mortgage rates change with market conditions and can also differ based on the details of the borrower, property, and transaction.
Credit profile and mortgage-payment history
Loan-to-value ratio and remaining property equity
Primary residence, second home, or investment property
Property type, loan amount, and selected loan program
Fixed-rate or adjustable-rate loan structure
Discount points, lender credits, and lock period
Compare More Than Principal and Interest
Your total housing expense may include several components in addition to the mortgage’s principal-and-interest payment.
For investment properties, also compare the proposed mortgage payment with rent, operating expenses, vacancies, maintenance, and reserve requirements.
Expenses That May Be Included in the Transaction
Actual charges depend on the loan, property, service providers, state, and closing requirements.
Lender and Origination Charges
These may include origination, processing, underwriting, administrative, and other lender-related charges.
Appraisal and Property Services
A valuation, inspection, flood determination, tax service, or other property-related service may be required.
Title, Escrow, and Recording
Charges may include title services, title insurance, settlement or escrow services, recording, and government fees.
Prepaid and Escrow Amounts
Prepaid interest, insurance, property taxes, and initial escrow deposits may be collected through closing.
Discount Points
A borrower may choose to pay an upfront charge in exchange for a lower interest rate when that option is available.
Existing Liens and Payoff Charges
Current mortgage balances, subordinate liens, accrued interest, and applicable payoff-related charges must be accounted for.
Out of Pocket, Financed, or Offset With a Lender Credit
Compare the Loan Estimate and Closing Disclosure
Review the interest rate, annual percentage rate, total monthly payment, loan costs, lender credits, prepaids, cash to close, and projected payments before signing final documents.
Learn how to compare Loan Estimates from the CFPBCash-Out Refinance Loan Programs
Cash-out refinance options may be available through traditional residential programs, non-QM financing, and investment-property loan programs. The right option depends on occupancy, property type, equity, credit, income documentation, and refinancing goals.
Programs for Homeowners
These options generally focus on the borrower’s income, credit, monthly obligations, equity, and ability to manage the proposed mortgage payment.
Conventional Cash-Out Refinance
A conventional program may be available for eligible primary residences, second homes, and investment properties, subject to applicable agency and lender guidelines.
FHA Cash-Out Refinance
FHA cash-out refinancing may provide an option for eligible owner-occupied borrowers who meet FHA credit, equity, occupancy, and mortgage-payment requirements.
VA Cash-Out Refinance
Eligible Veterans, service members, and qualifying surviving spouses may be able to refinance an owner-occupied home through the VA home-loan benefit.
Explore VA refinance optionsJumbo Cash-Out Refinance
Jumbo financing may be considered when the requested loan amount exceeds applicable conforming loan limits or the property and borrower require a larger-loan program.
Alternatives for Self-Employed Borrowers and Investors
These programs may use alternative income documentation or property-level cash flow when traditional qualification does not align with the borrower’s financial profile or investment strategy.
Bank Statement Cash-Out Refinance
Self-employed borrowers may be able to document qualifying income through eligible personal or business bank statements instead of relying solely on traditional tax-return income.
Explore bank statement loansDSCR Cash-Out Refinance
A DSCR program may qualify an eligible rental property primarily through its rental income and proposed debt service rather than the investor’s traditional personal-income documentation.
Explore DSCR loan optionsChoosing a Program Starts With the Property and Borrower
Primary residence, second home, or investment property
Employment, tax returns, bank statements, assets, or rent
One-unit home, condominium, multifamily, or rental
Current payoff, requested cash, property value, and costs
Cash-Out Options in California, Colorado, and Florida
WestPac Lending serves eligible borrowers in California, Colorado, and Florida. Program availability, underwriting, property eligibility, pricing, documentation, and loan terms vary by state, borrower, property, occupancy, and lending guidelines.
Is a Cash-Out Refinance Right for You?
A cash-out refinance may be useful when the available equity supports a defined financial or investment goal and the benefits of the new loan justify its payment, costs, and long-term borrowing expense.
Situations That May Support a Cash-Out Refinance
You Have Sufficient Available Equity
The property value and current mortgage payoff may leave enough eligible equity to accomplish your goal while remaining within program guidelines.
The Funds Have a Defined Purpose
You have a clear plan for renovations, debt consolidation, reserves, a major expense, or another real estate investment.
The New Payment Fits Your Budget
The proposed mortgage payment and total housing expense remain manageable after accounting for other debts and financial obligations.
You Expect to Keep the Loan Long Enough
The expected time in the property may provide enough opportunity for the benefits of refinancing to justify the closing costs.
Situations That May Require a Closer Comparison
Your Current Mortgage Rate Is Much Lower
Replacing the entire first mortgage could increase the cost of financing equity that may otherwise be accessed through a separate loan or line of credit.
You Only Need a Small Amount
Refinancing the full mortgage may not be efficient when the requested proceeds are modest compared with the loan balance and transaction costs.
You May Sell or Refinance Again Soon
A short ownership timeline may not provide enough time to recover the cost of completing another mortgage transaction.
The New Payment Would Reduce Your Flexibility
Increasing the mortgage balance may not support your goals when it would significantly reduce monthly cash flow or financial reserves.
Compare the New Mortgage With Your Household Goals
Consider the payment change, repayment period, remaining equity, closing costs, and how the proceeds may affect your overall financial position.
- Review the current and proposed interest rates
- Compare monthly and long-term borrowing costs
- Consider how much equity will remain after closing
- Maintain appropriate savings and emergency reserves
Compare the New Debt With the Expected Investment Return
Evaluate whether the proceeds are expected to improve cash flow, property value, rental income, reserves, or portfolio growth enough to support the additional debt.
- Calculate the property’s proposed debt service
- Estimate rent, vacancies, repairs, and operating expenses
- Preserve appropriate property and portfolio reserves
- Compare conventional, DSCR, bridge, and private options
WestPac Lending can review your current mortgage, estimated property value, requested proceeds, occupancy, and financial goals.
Frequently Asked Questions About Cash-Out Refinancing
Review answers to common questions about property equity, qualification, investment properties, appraisals, closing, proceeds, and potential tax considerations.
How much equity do I need for a cash-out refinance?
The amount of equity required depends on the loan program, occupancy, property type, credit profile, and other underwriting factors. Primary residences, second homes, and investment properties may have different maximum loan-to-value limits.
Does a cash-out refinance replace my current mortgage?
Yes. A cash-out refinance generally pays off and replaces the existing first mortgage with a new, larger first mortgage. Eligible proceeds remaining after payoffs and transaction costs are then provided according to the closing requirements.
Can I complete a cash-out refinance on an investment property?
Cash-out refinancing may be available for eligible rental and investment properties. Available leverage, pricing, reserve requirements, documentation, and property seasoning may differ from owner-occupied financing.
Is an appraisal required for a cash-out refinance?
Many cash-out refinance transactions require an appraisal or another approved valuation method to establish the property value. The required valuation depends on the loan program, property, transaction, and underwriting findings.
How soon can I complete a cash-out refinance?
Timing and ownership-seasoning requirements vary by loan program. Some conventional programs may require the existing first mortgage or property ownership to meet a minimum seasoning period, while exceptions or different requirements may apply to other programs.
How long does the cash-out refinance process take?
The timeline depends on document readiness, the appraisal or valuation, title review, insurance, underwriting, required conditions, and closing availability. Complex income, property, or title situations may require additional time.
Can I use cash-out refinance funds to pay off debt?
Eligible proceeds may generally be used to consolidate credit cards, personal loans, or other obligations. However, doing so converts those balances into debt secured by the property and may extend the repayment period.
Are cash-out refinance proceeds taxable income?
Borrowed funds are generally not treated as taxable income because the borrower has an obligation to repay the loan. Individual circumstances can differ, particularly when proceeds involve a business or investment property, so consult a qualified tax professional.
Is cash-out refinance interest tax deductible?
Deductibility depends on the property, the use of the loan proceeds, applicable debt limits, and whether the taxpayer itemizes deductions. For a primary or second home, interest on cash-out proceeds may be deductible only when qualifying requirements are met. Consult a qualified tax professional for advice.
Can I cancel after signing refinance documents?
Certain refinance transactions secured by a principal dwelling may include a three-business-day right of rescission. Exceptions apply, and investment-property transactions may be treated differently. Review the closing documents and cancellation notice provided for your specific transaction.
Review Your Cash-Out Refinance Options With WestPac Lending
Whether you are accessing equity from a primary residence or an investment property, a personalized review can help you compare available proceeds, estimated payments, closing costs, and loan programs.
Review owner-occupied and investment-property options
Compare conventional, government, jumbo, and non-QM programs
Estimate available equity, payments, and closing costs
Work with a mortgage professional serving California, Colorado, and Florida
Start With a Personalized Cash-Out Review
Tell us about your property, current mortgage, estimated value, requested proceeds, and financing goals.
Completing an inquiry or application does not guarantee loan approval or obligate you to proceed.
